Morningstar
Using Employee Data to Select an Appropriate Target-Date Fund
Target-date funds have been a boon to plan sponsors because of their simplicity and cost. Once selected, it’s easy for the employee to get invested in an appropriate fund without worrying about complex investment decisions.
However, choosing the proper target-date series is where sponsors can get tripped up. It’s easy to focus on tangible items such as cost and management type (active vs. passive), and even easier to overlook characteristics such as the glide path design. The glide path is the adjustment of equity allocation over time and is an important consideration in finding a suitable retirement solution for plan participants.
Paper Cover: How Can You Help Your Employees Retire?
Using Employee Data to Select the Right Target-Date Fund
Download the full white paper to learn more about potential glide path mismatch and a quantitative framework that may help solve this problem.
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